Current and Potential Economic Rent in the Namibian Hake Fishery PublicDeposited

Descriptions

We estimated the economic rent obtained currently (that is, in 2002) in the Namibian hake fishery and the rent that might potentially be obtainable if the fishery were managed optimally in the sense of economics. We first reviewed previous economic and biological studies. We then used the theory and model of Arnason [1] to estimate the current and potential rent in the Namibian hake fishery. Our estimates were that the current rent is 21 million USD (90% confidence interval in sensitivity analysis: 13-31) in 2002, with the potential for rent of approximately 112-118 million NAD (90% confidence intervals: 90-140 for logistic model and 84-135 for Fox model) annually if the fishery were managed optimally, i.e., with a much larger stock and a smaller fishing fleet. These estimates were particularly sensitive to some parameters, especially the cost parameter, but in general appeared to be fairly robust. Our estimate of current rent is roughly in line with previous estimates of the same number, while our estimate of potential rent is somewhat higher. We find that approximately 5-6 times greater wealth could be generated from this fishery if it were managed in a way closer to the economic optimum.